Why Is Paying Cash Cheaper?

The short version: Cash is cheaper because the doctor doesn’t have to deal with insurance.

The long version: If you have ever tried dealing with an insurance company, you know it can be very difficult. It is hard to describe the problem correctly, that makes it hard to talk to the correct person, who may struggle to fix the problem correctly and in a timely fashion. It’s stressful, difficult and time consuming because insurance is so complicated. It is even more complex for doctors and providers. Some providers have employees whose only job is dealing with insurance. According to an ACP estimate, a doctor spends between $68K and $85K per year on billing and insurance company issues. A hefty percentage of insurance paperwork has errors (most of which are not typos, but from unclear and complex forms) and takes months to fix. This means payment to the doctor is months behind actually seeing the patient and the (some) doctor spends a third of their salary trying to get the other two thirds.

When you pay cash (paper, credit card, debit card, etc.) the doctor gets paid (essentially) immediately. They don’t have to deal with filing paperwork and getting the right codes and figuring out which paperwork is the correct paperwork. They just get paid and are done. They save all the time and effort from dealing with insurance and can charge less. Several providers in the uMed Network charge less for cash payments than for insurance “cash” payments. Several high deductible health plans have pre negotiated cash prices. These cash prices are often higher than the true cash price because the doctor still has to deal with insurance. But, many providers are contractually obligated to charge the higher insurance pre negotiated cash price if the patient mentions their insurance. If you don’t mention your insurance, you will often get a lower price.

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